News Corp. is "considering consolidating its broadcasting assets by combining Fox Sports Australia with its 50 percent stake in Foxtel to create a sports and entertainment pay-TV giant" ahead of an A$8B ($6.1B) stock market float, according to Darren Davidson of THE AUSTRALIAN. A deal would "transform Foxtel into a much larger and even more profitable cable and satellite broadcaster, making it more attractive to investors who want to bet on the soaring value of sports rights." Any move by Foxtel to take full control of Fox Sports "would represent one of News Corp.’s biggest strategic moves since Rupert Murdoch split his media empire" in '13. The media company is "working on a deal with advisers Citi and Goldman Sachs." Talks involving News Corp. Global CEO Robert Thomson "were held in Sydney last week." News Corp. has 100% of Fox Sports Australia and 50% of Foxtel, "with the remainder owned by Telstra." Initially, News Corp. would own about 51% of Foxtel, leaving Telstra with 19%. Discussions have also "emcompassed a new wholesale broadband agreement that would enable Foxtel to buy the service from the telco on more favourable terms" (THE AUSTRALIAN, 3/20).
SUSPICIONS: In Sydney, Dominic White wrote the A$8B Foxtel float that could follow its proposed merger with Fox Sports "would not be a divorce between the pay TV giant's shareholders but a delicate accord after a fractious, sometimes messy but ultimately profitable 21-year marriage." For a start, Telstra "has always had its suspicions about Fox Sports." Fox Sports makes most of its A$135M ($102M) underlying profits in monthly fees from Foxtel -- "based on the number of subscribers" that take its programs. Telstra was "always paranoid that Fox Sports could have been siphoning off the Foxtel mother lode, particularly back in the day when Fox Sports -- then also-owned by Consolidated Media Holdings -- was highly profitable and Foxtel was still leaking cash" (SYDNEY MORNING HERALD, 3/21).
MARKETING OVERHAUL: AD NEWS' Rachael Micallef reported Foxtel is "overhauling its branding" with the launch of a new brand platform that sees it move "beyond price to push content and ease of use, as it looks to take on both streaming video on demand (SVOD) and free to air (FTA) competitors." The campaign was created by Whybin\TBWA, "following a competitive pitch for the project," and sees the subscription TV service adopt a new tagline, "Make it Yours" (AD NEWS, 3/21).
